For many of us, New Year's resolutions often vanish in days - weeks at most.
The latest update of a University of Scranton study puts "weight loss" as the No. 1 New Year's Resolution with 21 percent of respondents, followed by "improve finances" with 14 percent. Nearly half are successful by the six-month marker; the rest give up during that timeframe.
Your personal finances require a better outcome. Even if you've resolved before and failed, there are still ways to set a course and stay on track.
Resolution-keeping starts with good resolution-making. It's one thing to say, "I want to pay off my student loans," or "I want to retire early." It's another to measure the size of the challenge, identify obstacles and build a task list to make that goal happen. So if you've committed to a particular resolution, go through it again and identify the behaviors and practices you need to change.
For example, if you wonder whether you're saving enough, maybe your first resolution is to make or review your budget to get a realistic picture of where your finances stand at all times. After all, a 2013 Gallup survey reported that only one-third of Americans actually prepares a detailed household budget.
Want to add some fairly easy money resolutions that can help your finances overall? Consider the following:
Know your net worth. Budgeting involves day-to-day tracking of finances, but having a quick way to determine your net worth - your assets minus your liabilities - offers the biggest picture of how you're doing and what next steps you might take to improve your circumstances. Make this calculation an annual kickoff to the New Year.
Build an emergency fund. If you don't have money equal to three-to-six months of daily expenses set aside, make that a priority. Shoring up an existing emergency fund - and evaluating whether it's still adequate to your needs - is probably one of the best ways to keep other financial goals on track. After all, when emergencies happen, it pulls funds away from bills you need to pay as well as savings and investment goals.
Automate. Depending on your comfort level with all things digital, virtually every aspect of your financial life can be managed online or with computer-based software. From setting up a basic online calendar to track pay dates, bill due dates and deposit dates for savings and investments, automation could help you create a daily series of reminders and action items that will keep your money issues on time and on track.
Recommit to retirement. If you're employed or self-employed, here's how to make a retirement savings resolution stick. First, make sure you're signed up for a 401(k), 403(b) or 457 plan at work or a corresponding SEP-IRA, self-directed 401(k) or other self-employment retirement plan that fits your tax and financial situation. Then check what your 2016 maximum contribution is for your respective plan. Finally, through budgeting or a plan to bring in more income, determine how you can come as close to your maximum contribution as possible for the coming year. And of course, don't forget about Traditional or Roth IRAs that you can contribute to independently of these employer-based plans. All of these options can improve your retirement prospects while saving you considerable money on taxes.
Evaluate all of your investments. Here's where it's not a bad idea to get some qualified professional help, starting with your employer-based savings and retirement plans. The Employee Benefit Research Institute reported in December 2014 that at year-end 2013, the average 401(k) account balance was $72,383 and the median account balance was $18,433. Not only are those amounts a little low based on savings projections made about what most Americans will need for retirement, but there are other potential problems like inadequacy of personal savings and lack of education about asset allocation based on age and other factors. Consulting with a qualified financial advisor and tax professional for an overview on your entire financial picture may be a very good idea.
Review your benefits and insurance. For most employed and self-employed people, open enrollment for health and other company benefits wrapped up before year-end. But that doesn't mean you can't spend time reviewing the choices you've made for health insurance, retirement savings or flexible spending plans, as well as reviewing your personal home, auto, life and disability coverage for potential savings and/or better coverage. If you work with a qualified financial planner or tax professional, you might want to bring up some of those questions with them.
Reset savings and bill repayment goals. By now, you're probably getting a very good indication that most of your financial decisions are linked. Get some assistance in determining how best to address the amounts and types of bills you have so you eventually free up more money for savings and investments.
Set regular reviews. It's generally a good idea to review your budget performance monthly to identify unusual items and plan for expenses you'll have to tackle in the future. You may want to take an overall look at your finances in January and June to make sure spending, savings and investment goals are on track.
Bottom line: Making financial resolutions makes you feel good. Keeping those resolutions feels a lot better. Develop long-term money habits that position you for success.
Nathaniel Sillin directs Visa's financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney
This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.